Look back five years and the PR measurement field was full of challenges:

- Emphasis on media relations at the exclusion of other high-value PR activities, almost always
- Oriented toward outputs and not outcomes, consisting
- Primarily of media content analysis, with
- Little primary audience research, and
- No codified thinking on how to approach ROI determination.

Now add social media.  Old metrics like Impressions lose meaning.   It’s about engagement and not eyeballs.  Consumers have broad platforms to voice opinions about your brand.  Conversations are more effective than messages.  So needless to say, social media measurement is a highly fluid, and rapidly evolving field.  Lots of opinions, not much consensus.  Here is where I believe we are at a high level.

Early efforts to measure digital and social media focused almost exclusively on web analytics.  I would say the majority (80%?) of social media measurement in 2009 still focuses on web analytics, although many other forms of data and research are being used by leading organizations and practitioners.

Today, the frontier in social media measurement is evolving toward measuring the conversations and behavior patterns occurring within social networks.  The third area of interest is in tracking and connecting online and offline behavior and actions.  Here is a simple graphic (you may have a much better way of showing this) that shows these three primary interest areas, or zones, for social media measurement.

From the left, companies or brands control, own or manage websites  – corporate sites, FaceBook pages, Twitter accounts, LinkedIn pages and blogs by way of example – and create content that consumers may engage with.  This zone is measured primarily by web analytics.  In the middle are the actual social networks and conversations between individuals.   In this zone we are interested in data sets that cannot be gathered solely using web analytics packages.  How often is the brand being mentioned in conversation?  What is the sentiment of the comments?  How often is the brand being recommended and by whom?  Content and behavior analysis, including tracking technologies, are the primary measurement tools in this zone.  The third zone represents all the real-world, offline transactions that may be of interest.  Did someone visit the store or attend or event?  Did they buy a product?  Did they recommend the brand or product to a friend over coffee?  Primary audience research is necessary to address many of the questions, as well as scan or other purchase data in some cases.

Although I have attempted to define three distinct zones of measurement necessary to address the full spectrum of social media impact and ROI, your measurement strategy should be to take a holistic, integrated approach using methodologies, tools and data from all three zones.  The Holy Grail in many ways is to be able to track behavior of individuals across all three zones, cross-platform, understanding how online behavior impacts offline behavior and vice-versa.  It won’t take five years to get there.

The 2009 Jack Felton Golden Ruler Award, created by the Commission on Public Relations Measurement & Evaluation, is open for entry here.  Entry deadline is Aug. 15, 2009. The award recognizes superb examples of research used to support public relations practice.

The Institute for Public Relations publishes the winners as case studies on its website. Winners will receive their awards at the Summit on Measurement held in October in Portsmouth, New Hampshire (USA).

PR News is the award program’s media partner. The award is named for Jack Felton, who served as President and CEO of the Institute and was instrumental in founding the Commission.

Social media and public relations programs create value and in some cases generate demonstrable ROI.  The two concepts are different in important ways.  They are related like the rectangle and the square.  Remember that silly distinction you learned in elementary school?  A square is a rectangle, but a rectangle is not a square.  ROI is a form of value, but not all value takes the form of ROI.

ROI is a financial metric – percentage of dollars returned for a given investment/cost.  The dollars may be revenue generated, dollars saved or spending avoided.  ROI is transactional.  ROI lives on the income statement in business terms.

Value is created when people become aware of us, engage with our content or brand ambassadors, are influenced by this engagement, and take some action like recommending to a friend or buying our product.  Value creation occurs over time, not at a point in time.  Value creation is process-oriented.  Value lives on the balance sheet.

From a sales process perspective, the ultimate value of a social media program may be in increasing the number of people who are likely to buy our products and services.  Other programs may be designed to improve or protect corporate reputation or to build and enhance brands.  Much of this value is said to be intangible.  It is goodwill that becomes tangible at the point in time a transaction occurs.   When buying decisions happen, your investments in marketing, brand and reputation work together.  They become tangible.  You can measure the ROI.

Many of the well-intentioned but misguided attempts to rename or reinvent what ROI means in social media – return on influence and return on engagement probably getting the most play – seem to be the result of an inability to distinguish value creation from ROI.  We know social networks have the ability to create value through customer engagement and community building.  However, ROI can only be measured by their ultimate impact on downstream metrics like sales, employee retention and customer loyalty/repeat purchase.

Your investments in social media or public relations remain an investment, creating additional value if done correctly, until which time they can be linked to a business outcome transaction that results in ROI.

Trying to get, keep or increase your budget for social tools, people and programs?   Estimate ROI where you can, but also try to articulate the value your programs will be creating, and how this value aligns with, and contributes toward achieving one or more desired business outcomes.  Propose metrics to track and assess progress in exposure, engagement and audience influence.  This is a better conversation to have than, “Let me tell you about Return on Influence…”

Make sense?

In a January post of 2009 social media predictions I wrote:

2009 will be the year when the pendulum swings from experimentation to accountability.  2009 will raise the bar on all of use to demonstrate how social media and PR programs are helping to drive desired business outcomes.

Are you are seeing the accountability bar being raised this year?  In my corner of the world, the volume of conversation about social media ROI is high and accelerating. Unfortunately much of the conversation has been misinformed and misguided.  It seems like every week brings another post attempting to reinvent the acronym or the meaning – ROI really means Return on Influence, or Return on Engagement is the new ROI, and on and on.  There is another group of online Zen Masters who would have you believe social media ROI is old school thinking and not in tune with social media Zeitgeist.   In that case, I’ll take’ Old School’ for $100, please.

Here are five things about social media ROI you should know:

1. Return on Investment is a financial metric.  It tells the percentage of financial return you generated for a given investment level.  The financial return is usually revenue, but may also be money you saved by making the investment or money you avoided spending in the future.   Notice the common thread here – its about money.
2. Attempts to reinvent the acronym are counterproductive.   Return on Influence/ Engagement/Whatever; do not ever get to the basic money question.  Most of these attempts share two characteristics – they are confusing ‘return’ with impact/results (read Olivier Blanchard’s The BrandBuilder Blog for more on Impact/Return confusion), and/or they are making an argument that social media ROI is largely intangible, represented by relationships, engagement and community.   What they are really saying, perhaps unintentionally, is ROI is often difficult to determine and I really don’t understand it.  In my opinion, attempts to reinvent or circumvent ROI discussion in social media actually hurt credibility with the people writing the checks.  They expect an apples-to-apples – money in and money out – discussion.
3. ROI in social media has a time dimension.  Value may be created in the short-term and longer-term.  Social media-specific promotions are an example of easily measured short-term ROI.  Longer-term value is much more difficult to quantify.  There are some similarities between social media and brand in this regard.  Success in each is a process and not an event.  You generally will have ongoing activities that sustain the brand/social media program and brand building events or campaigns that provide short-term spikes in awareness and engagement.  Contribution to organic search results is another example of longer-term value creation with branding and social media efforts.   Managing and measuring your social media effort properly requires thinking about the value you are creating in the short and longer-term.
4. Linkage and correlations are important.  In order to demonstrate ROI in social media it is necessary to link the results seen in social media with the relevant business processes they are addressing.  For example, in a B2B company, you might try to link social media efforts with the lead generation and closure process.  For a program aimed at employee engagement, you might link social media efforts to the employee recruitment and retention business process.  For an eCommerce company you might be able to directly link to the sales process through unique URLs or click-tracking technologies.  When attempting to show statistical relationships, correlations become important.  We might try to correlate social media brand engagement and audience influence with metrics like likelihood to recommend to a friend, likelihood to seriously consider the product or likelihood to purchase the product in the next X months.
5. All ROI studies are custom.  The simple fact is you cannot buy an off-the-shelf solution to calculate the ROI of your social media effort.  All ROI studies are custom.  This is primarily a reflection of the unique objectives each company may have for their social media efforts.  Objectives are specific and contextual, and your ROI measurement efforts will need to be as well.   Attempts to develop ROI Calculators where you simply plug in several numbers and hit a button to calculate your ROI are not worth the time it takes to plug in the data.  They are a one-size fits none approach to ROI.  (Read this brilliant and very humorous post by The Brand Builder where he methodically skewers a recent ROI calculator attempt).

We are in the very early stages in our ability to measure the ROI of social media.  Not enough cycles yet.  Case studies are limited but growing.  The need to demonstrate a financial return on social media investment, if not here already, will be here shortly.  We have a lot of work to do.  Let’s get started.

Every week there are multiple articles and posts on measuring Influence in social media.  The vast majority of these focus on assessing who are the ‘Influencers’ – those analysts, pundits, micro-celebrities and visionaries whose words and actions influence others in their online communities.  Influencers are an important element of your audience targeting strategy.  (Here’s a great post from Todd DeFren on audiences and influencers).

Influencers are a potential social media strategy, but we should measure social media objectives to determine whether or not programs are working as planned.  For that we have to turn to the other type of online influence, audience influence.

With audience influence, we want to understand what influence, if any, our social media efforts have had on audience opinions, attitudes and behaviors.  Here’s a social media measurement model that shows where audience Influence fits with the other major measurement stages, Exposure, Engagement and Action.

• Exposure – to what degree have we created exposure to content and message?
• Engagement – who, how and where are people interacting/engaging with our content?
• Influence – the degree to which exposure and engagement have influenced perceptions and attitudes
• Action – as a result of the social media effort, what actions if any has the target taken?”

In the model, successful relationships with Influencers would be represented as an aspect of Engagement – i.e. Influencers have the ability to influence if and how consumers engage with brands.

To measure audience influence typically requires primary research to quantify attitudes and opinions and to assess the role, if any, social media efforts had in any attitudinal changes and subsequent behavior.  Once we understand how Exposure and Engagement are impacting Influence, and whether or not Influence is motivating Action, we are well on our way to the understanding and data necessary to demonstrate the true ROI generated by social media.

In summary, determining who has influence should be part of your audience targeting strategy, determining whether or not you are creating audience influence should be part of your measurement strategy.

See it a different way?

One of the hotter topics in my corner of the Twitterverse is Return on Investment (ROI).  How do you calculate the ROI of social media?  What’s the ROI of Twitter?  The questions are many, the answers too few.  There have been several blog posts on the subject (here are just three examples – Tim Ferriss, Olivier Blanchard, Zygote ), and I plan to post an overview and synthesis of some of the better ones in the near future.   One important question seems to be missing from much of the conversation, to what degree should social media be considered a cost of doing business (from a corporate/organizational viewpoint) rather than a distinct activity that must/should be justified by hard ROI?

If your customers want the option of customer service via Twitter do you really have an option long-term?  If crises are often spawned in social media, how optional is listening/monitoring if you want to protect your brand?  Increasingly, the corporate world will realize the options are all with the consumers/customers and how, how often, what and why we communicate will largely be in response to this dynamic.  When voicemail came on the scene (patented in 1983), I’m sure the ROI pencils were sharpened and presentations made.  When was the last time someone was asked to justify the cost of voice messaging or 800 numbers or email?  They are all considered part of the cost of doing business today.  In a relatively short period of time I believe many applications of social media – CRM, crisis monitoring and listening to customers/competitors/industry voices and many others – will be considered necessary, baseline activities to doing business in the 21st. century.

The ability and need to demonstrate ROI in social media should be considered contextual and dependent on specific program/initiative objectives.  If the objective is ‘listening and learning’, what’s the ROI on insight?  However, in other cases, program objectives will be to drive a specific business outcome, and demonstrating ROI will be expected and required if budgets are to follow.  Dell offering product promotions on Twitter was closed-loop and easy to calculate ROI.  HyperLocal marketing by Kogi or your local pizza shop on Twitter is measureable in incremental sales.  You can calculate the ROI on a hotel or resort offering last-minute cut-rate weekends via FaceBook.

Knowing when social media should be considered part of the cost of doing business and making this case to your company or clients may just make the ROI imperative a little less urgent and more focused in the right areas.

Thanks for reading and please comment if you agree or see it differently!

Don B

@donbart

A few months back someone posed a question in a Linked-In discussion group wondering how much the major hit in USA Today he had just got for a client was worth.  Obviously he is not the first PR practitioner to ask this question.  Before pondering the answer, there are several questions we should address first:

• How many people in our target audience had an opportunity to see the placement?
• How many actually saw it?
• Of these, how many actually read the article?
• Of those reading it, did it change their thinking in any way?
• Did they forward it on to others?
• Mention it in a phone conversation with a friend?
• Visit a website?
• Digg it.
• Tweet it?
• Blog about it?
• Buy it?…

While one must have Exposure before Engagement, much like Awareness must precede Purchase Consideration, true value creation begins at the Engagement stage.  Using old school language, value occurs with Outcomes, not Outputs.  Seems simple enough yet the majority of PR professionals are still relying on output-oriented metrics like clip counts and ad value equivalents (AVEs) to judge success.  PR pros who are savvy about social media seem to be further evolved.  They understand that true value is not in the content (an output) per se, but in the level of engagement caused by the content.

Are you looking for value in all the right or wrong places?

With more public relations programming occurring online than ever before, the measurement world seems increasingly seduced by readily available and increasingly sophisticated web analytics.  Indeed, with respect to social media in particular, it seems the majority of thought leadership in measurement today is being driven by web analytics gurus and not measurement gurus (there are a few exceptions of course).  No real problem here since web analytics add real value in understanding online behavior.  They do a good job of understanding the what, the who and the where.  And the cost is often quite low to obtain the data.

A concern with a singular emphasis on web analytics is they do not provide any real insights into the whys driving the behavior.  What are people thinking when they interact with our content?  Are we influencing the way they perceive the brand or company?  What are the reasons they buy or not buy a product?   These insights not only help us better measure our results, they help inform the development of better and more effective future programming.

I don’t see this as an either/or proposition.  The best answer is both.  And add in content analysis too as a diagnostic tool.  A holistic, integrated social media/PR measurement approach that utilizes web analytics, content analysis and primary audience research adds measurement richness and provides valuable formative insights.  All research/measurement is good.  More is better.  Holistic is best.

A little silliness for a Thursday afternoon…compiled from my Twitter series.

Good Is Never Easy

Social Media
Is Not Easily Measured
But We Must All Try.

Engagement Not Eyeballs

Engagement Is Key
But How To Best Measure It?
Not By Counting Clips!

Trust Me, It Works

Social Media
ROI Not Understood
Just Trust It’s Working?

(With tongue firmly in cheek and apologies to Jeff Foxworthy)

• …Getting that big hit in a daily newspaper or national magazine is your primary PR objective

While traditional media relations will continue to play a role in public relations programming, its importance and impact is shrinking at an alarming rate with each new publishing industry announcement of shuttered of operations, three day a week printing schedules and Chapter 11 filings.  Over 120 newspapers have folded entirely (CNN article here).  Anorexic-thin magazines appear starved for advertising.  To compound the issue, according to the latest Edelman Trust Barometer, only 44% of consumers trust what they read in magazines and 34% trust what they read in newspapers.  Shrinking footprint combined with shrinking credibility does not portend well for traditional print media.

The best PR programs today take a broad, holistic view of the various avenues to engage with customers and prospects – traditional media, social media, community involvement, grassroots events – and attempt to do so in ways the customer/prospect respects and prefers.

• …Your measurement program key metrics include number of hits, impressions and ad values/AVEs

It is fine to include a couple of volume-oriented metrics like number of unique articles or net positive OTS in your program, but these sorts of metrics do nothing to capture the value created by your program.  In order to capture value, we must understand the audience effects or outcomes of public relations programming.  Emphasis on output metrics like these may also be a reflection of a program oriented toward traditional media.  Traditional media metrics do not translate well to social media where the name of the game is engagement and not (just) eyeballs.   Double redneck points if you are using multipliers on impressions and/or AVEs to assign financial value to media hits.

• …The big social media question you/your department have been asked to answer is “Should our CEO start a blog?”

The problem is this is almost always the wrong question at the time it is asked.  There are larger, more contextual, ones to ask first.  When a company begins to think about using social media, a CEO blog is often the first tactic considered.  The prospective blog can potentially become a solution in search of a problem.

Take a step back and put the prospective blog in context by thinking through the bigger questions first.  What key concepts and terms are strategically important to the company?  Can we develop a thought leadership platform designed to enhance relevance, credibility and authority in key areas?  Do we have anything important to add to the conversation?  Who from our company should be the voice of the company in key strategic areas?  Does this individual currently have authority in this area?  Is a blog a good strategy/tactic to deploy?

• …Your communications program attempts to control more than contribute

While much advancement in communications theory has occurred since the Transmission and Direct Injection models of the 1950s, the mindset and behavior of many PR practitioners seems trapped in this ‘message as a drug’ mentality.  We want to control the message, manage our relationships and otherwise wield direct influence over our stakeholders.  This command and control mindset is truly out of phase with social media/market dynamics today.  What is needed is a shift away from control toward contribution.  How can you contribute to the conversation?  What content can you provide the community would find of value?  How can we give people a reason to talk about our brand?

As an industry we must become more comfortable participating rather than orchestrating.

• …You are thinking vertically and tops-down rather than horizontally and non-hierarchical

Many comments on social media posts immediately speak to the wonders of synchronous communication – creating a dialogue rather than a monologue.  While synchronous communication has great value in gathering feedback and creating some level of dialogue, it remains a form of vertical communication.  In social media, however, the world is flat or horizontal.  Every piece of research I have seen suggests consumers value the opinions of other consumers, people ‘just like them’, more than they do companies or media pundits.  The greater value in social media is peer-to-peer horizontal communication, broadly referred to as WOM.  Taking a spin on the old global/local saying, the PR profession needs to ‘act vertically but think horizontally’.

Thanks for reading, Don B

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